ALICE - ONE YEAR LATER LES - Silicon Valley Chapter July 22, 2015 - PowerPoint PPT Presentation

ALICE - ONE YEAR LATER LES - Silicon Valley Chapter July 22, 2015 Panelists: Michael Zachary Matt Wade John Cabeca Sandy Godsey Ivan Chaperot 1

398 DSAWD 2

Introduction • CLS Bank v. Alice (U.S. Supreme Court 2014) • Two Step Test: • 1) is the claim “directed to” a patent-ineligible abstract idea • 2) do the elements of the claim—considered both individually and as an ordered combination— transform the nature of the claim into a patent- eligible application of the abstract idea • “inventive concept”— must be something sufficient to ensure that the claim amounts to “significantly more” than the abstract idea itself 3

Case Filing Statistics: All District Courts 4

Case Filing Statistics: D. Del, N.D. Cal, C.D. Cal & E.D. Tex 5

Case Filing Statistics: D. Del 6

Case Filing Statistics: N.D. Cal 7

Case Filing Statistics: C.D. Cal 8

Case Filing Statistics: E.D. Tex 9

Chronological Overview of post-Alice Federal Circuit Decisions • Digitech Image Technologies LLC v. Electronics for Imaging Inc., 758 F.3d 1344 (Fed. Cir. 2014) (Invalid) • Planet Bingo, LLC v. VKGS LLC, 576 Fed.Appx. 1005 (Fed. Cir. 2014) (Invalid) • BuySAFE Inc. v. Google Inc., 765 F.3d 1350 (Fed. Cir. 2014) (Invalid) • Ultramercial LLC v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (Invalid) • DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) (Valid) • Content Extraction and Transmission LLC v. Wells Fargo Bank NA, 776 F.3d 1343 (Fed. Cir. 2014) (Invalid) • OIP Technologies, Inc. v. Amazon.com, Inc., No. 2012-1696, 2015 WL 3622181 (Fed. Cir. June 11, 2015) (Invalid) • Internet Patents Corp. v. Active Network, Inc., No. 2014-1048, 2015 WL 3852975 (Fed. Cir. June 23, 2015) (Invalid) 10

Federal Circuit’s DDR Decision DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) • Patent found eligible under Section 101 • Claim language: • “using the data retrieved, automatically generate and transmit to the web browser a second web page that displays: (A) information associated with the commerce object associated with the link that has been activated, and (B) the plurality of visually perceptible elements visually corresponding to the source page.” 11

Federal Circuit’s DDR Decision • Did not decide Step 1 of Alice analysis: • Noted that the claims did not recite a mathematical formula, or a long-standing commercial practice. • But did not rule whether the patent claimed an “abstract idea” 12

Federal Circuit’s DDR Decision • Held that Step 2 was satisfied • “The claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks”. • In particular, the ′ 399 patent’s claims address the problem of retaining website visitors that, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be instantly transported away from a host’s website after “clicking” on an advertisement and activating a hyperlink. • Further, unlike in Ultramercial , the patent does not broadly claim use of the internet to perform abstract business practices. • The claims specify how the interactions with the internet are manipulated to yield a desired result – a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink. 13

Abstract Ideas across the Atlantic US Europe 1) Subject-M 1) S bject-Matter tter Eligibility ligibility 1) Technical 1) T chnical Character Character Statutory categories of invention from The term “invention” in Art. 52(1) EPC 35 U.S.C. § 101 (process, machine, interpreted as implying a requirement of manufacture, or composition of technical character. “Technical solution matter). to a technical problem”. 2) Judicial E 2) J dicial Exceptions ceptions 2) E 2) Excluded cluded Subject bject Matters tters A) Laws of nature, natural Art. 52(2) EPC: discoveries, scientific phenomena, and abstract ideas. theories […] presentations of information. B) Amount to significantly more than the judicial exception? Art. 52(3) EPC: only excluded “as such” 14

Case Law Trends • The “rooted in computer technology” rationale of DDR requires: • Innovative and new use of internet or computer networks, etc. to solve a problem unique to that context • This innovative aspect must be specifically defined in the claims, not just claiming use of the internet or computer or computer network in a generic way • The claims must be directed towards some improvement in the functioning of the computer or some technological area, or must override the routine, conventional sequence of events associated with the computer or network’s operations. 15

Case Law Trends • An overwhelming majority of invalidations appear to involve abstract ideas being implemented on a generic computer. • This rationale accounts for more invalidations than all others combined. 16

Case Law Trends • Specificity in claims is important. • Courts have uniformly stated that functional language is insufficient, because it usually means that there is nothing inventive about the claims. • E.g., Loyalty Conversion Sys. Co. v. American Airlines Inc., No. 2:13– CV–655, 2014 WL 4364848 (E.D. Tex. Sept. 3, 2014) • Claiming the end result, as opposed to the steps to get there (which is where any inventive concepts will be found in the abstract idea context) will almost always result in invalidation. • Even if the spec provides support, limitations are not read into the claims. • Also, patentees and litigants should beware of language consisting of generic hardware as these often times may only serve to underscore the generic nature of the hardware and the function it performs. 17

Trends – Step One Analysis • The first step of the Alice test is determined by looking at the purpose of the claims. • Generally a broader, “quick look” type of inquiry. • Courts will often determine if claims are directed to abstract ideas merely by comparing them to the claims at issue in Alice and Bilski . • The court does not filter out claim elements found in prior art and evaluate the remaining elements for abstractness. • Exception: McRo case in CD Calif (heavily criticized) 18

Trends – Step Two Analysis • Most courts do not rely heavily on the machine or transformation test • Exception: Delaware. • E.g., TriPlay, Inc. v. WhatsApp Inc., No. CV 13- 1703-LPS, 2015 WL 1927696 (D. Del. Apr. 28, 2015) • Most courts do not try to determine the extent to which an invention may “preempt” the field of the abstract idea, since such an inquiry is inherent in the second step of the Alice test • Exception: CD Calif. • Cal. Tech., 59 F. Supp. 3d 974 (C.D. Cal. 2014) 19

Trends – Step Two Analysis • Courts in most districts have started looking to the “rooted in computer technology” rationale of DDR • Do the claims: • “purport to improve the functioning of the computer itself or effect an improvement in any other technology or technical field” or • “override the routine and conventional sequence of events in order to cause some deviation from a computer or network operating in its normal, expected manner.” 20

Analysis of Specific Claims Held Patentable • California Inst. of Tech., 59 F. Supp. 3d 974 (C.D. Cal. 2014) • Patent claimed a method for encoding and decoding data in accordance with IRA codes as patent eligible subject matter. • Step 1 of Alice analysis: • Abstract: “Encoding and decoding data are long standing steps in the process of error correction”. • Although the claims were directed to one specific method of error correction, step one looks only to the general purpose of the claims. 21